FutureFuel Corp. - 10-K filing on 2016-03-10

Note 19 - Related Party Transactions

12 Months Ended

Dec. 31, 2015

19)	Related party transactions

FutureFuel enters into transactions with companies affiliated with or controlled by a director and significant stockholder. Revenues, expenses, prepaid amounts, and unpaid amounts related to these transactions are captured on our accompanying consolidated financial statements as related party line items. These related party transactions are summarized in the following table and further described below.

Related party balance sheet accounts

	2015		2014
Accounts receivable
Biodiesel, petrodiesel, blends and other petroleum products	$	10	$	1,173
Total accounts receivable	$	10	$	1,173
Prepaid expenses
Administrative services and other	$	35	$	-
Total prepaid expenses	$	35	$	-
Accounts payable
Natural gas and fuel purchases	$	233	$	2,912
Travel and administrative services	$	11	$	-
Total accounts payable	$	244	$	2,912
Accrued liabilities
Travel and administrative services	$	-	$	46
Total accrued liabilities	$	-	$	46

Related party income statement accounts

	For the years ended December 31:

	2015		2014		2013
Revenues
Biodiesel, petrodiesel, blends and other petroleum products	$	64,981	$	39,090	$	9,420
Total revenues	$	64,981	$	39,090	$	9,420
Cost of goods sold
Biodiesel, petrodiesel, blends, and other petroleum products	$	2,412	$	51,647	$	44,548
Natural gas purchases		4,190		7,095		6,007
Income tax, consulting services and other		60		80		80
Total cost of goods sold	$	6,662	$	58,822	$	50,635
Distribution
Distribution and related services	$	405	$	335	$	392
Total distribution	$	405	$	335	$	392
Selling, general and administrative expenses
Commodity trading advisory fees	$	143	$	132	$	132
Travel and administrative services		72		82		267
Total selling, general, and administrative expenses	$	215	$	214	$	399

Biodiesel, petrodiesel and blends

FutureFuel enters into agreements to buy and sell biofuels (biodiesel, petrodiesel, biodiesel/petrodiesel blends, RINs, and biodiesel production byproducts) and other petroleum products such as gasoline with an affiliate from time to time. Such agreements are priced at the then current market price of the product, as determined from bids from other customers and/or market pricing services. Cost of goods sold related to these sales includes variable costs and allocated fixed costs.

Natural gas purchases

FutureFuel utilizes natural gas to generate steam for its manufacturing process and to support certain of its air and waste treatment utilities. This natural gas is purchased through an affiliate provider of natural gas marketing services. Expenses related to these purchases include the cost of the natural gas only; transportation charges are paid to an independent third party.

Income tax and consulting services

An affiliate provides professional services to FutureFuel, primarily in the area of income tax preparation and consulting. FutureFuel also receives certain finance and accounting expertise from this affiliate as requested. Expenses related to these services are comprised of an agreed quarterly fee plus reimbursement of expense, at cost.

Distribution and related services

Distribution and related services are comprised of barge transportation and related unloading charges for petrodiesel that were arranged and paid by an affiliate and subsequently rebilled to FutureFuel. Additionally, FutureFuel leases oil storage capacity from an affiliate under a storage and throughput agreement. This agreement provides for the storage of biodiesel, diesel or biodiesel/petrodiesel blends, methanol, and biodiesel feedstocks in above-ground storage tankage at designated facilities of the affiliate. Expenses related to this agreement include monthly lease charges, generally on a per barrel basis, and associated heating, throughput, and other customary terminalling charges.

Commodity trading advisory fees

FutureFuel entered into a commodity trading advisory agreement with an affiliate. Pursuant to the terms of this agreement, the affiliate provides advice to FutureFuel concerning the purchase, sale, exchange, conversion, and/or hedging of commodities as FutureFuel may request from time to time.

Travel and administrative services

FutureFuel reimburses an affiliate for travel and other administrative services incurred on its behalf. Such reimbursement is performed at cost with the affiliate realizing no profit on the transaction.